Daily Archives: 19 July, 2010

The new head of the British Armed Forces has criticised the UK Defence industry as ‘ailing’, in an article in the Mail on Sunday yesterday (18 July 2010, page 2). General Sir David Richards – the current Chief of General Staff of the British Army, and future Chief of the Defence Staff, warned that it was not the role of the military to spend money simply to ‘prop up’ British defence industry companies.

On that point, her certainly does make sense. Questions have been raised over UK Defence procurement for some time. In the same article, the Mail cites the £1.7bn paid for 62 Lynx Westland Helicopters, costing £27m each, from Anglo-Italian firm AgustaWestland. Apparently the MOD was repeatedly offered the option to buy American-built Black Hawk helicopters – far superior to the Lynx Wildcat – for £8m each. A similar situation took place years ago, when the MOD decided to purchase the SA80 rifle, largely as it gave business to British companies. The end-product was inadequate and needed large-scale modifications by Heckler Koch – bizarre given that the MOD could simply have bought from H&K in the first place.

What no-one seems to consider is, why is the UK Defence industry so expensive? Possibly due to prohibitively high costs of basing production in the UK, whereas foreign companies can pay staff less, and run on cheaper bills. Is it an option for companies such as BAE Systems and QinetiQ to up their game and become more competitive? Given the Generals comments, it sounds like ‘adapt-or-die’ will have to be their mantra. Thats probably why, in the recent BBC documentary, QinetiQ seemed to be moving into more civilian markets.

Not so long ago the British Defence Industry was the most productive and succesful in the world. Vosper Thorneycroft built ships for a multitude of navies around the world. Tanks such as the Centurion graced numerous battlefields during the Cold War. Even during the Falklands War, the Argentinian Navy had two Type 42 Destroyers. It does seem that in the past 20 or so years the British Defence Industry has lost its role in the export market – of recent British Defence projects, the only foreign interest in the Type 45 Destroyers is apparently ‘rumoured’ interest from Saudi Arabia. Only Austria and Saudi Arabia have purchased Eurofighters, and only Oman operates the Challenger 2 Tank. It seems that rather than buy British, many countries that might have done so in the past go for the cheaper American equivalents. Of course, there are very few truly British defence projects any more anyway. Its a sad state of affairs for what was once a thriving industry.

Where procurement is concerned, frequently the Government comes under pressure to buy British, in order to safeguard jobs. Defence debates in Parliament are always hallmarked by MP’s ready to stand up and speak out for jobs in ‘my constituency’. Recently thinkdefence analysed a Strategic Defence Review debate, and the words ‘my constituency’ featured more than any others. Of course MP’s have to stand up for their constituents – an MP who lets thousands of people lose jobs without a fight wont be an MP for much longer – but by the same token, this kind of lobbying leads to some hamstrung decision-making. For example, the Royal Navy is simply not large enough to warrant having three large main bases, but robust lobbying has protected jobs so far. At some point this will come to a head.

What astounds me most, however, is his comparison with Thatcher’s strategy of destroying loss-making industries such as coal and steel in the eighties. Although maybe not quite so overt as his predecessor, Sir Richard Dannatt, reading between the lines it IS a political statement. Hero-worshipping Margaret Thatcher leaves no illusions as to Richard’s politics.

Of course its important that the Defence budget is used to maximum effect by employing best value, but that doesn’t mean the threat of thousands of job losses should be talked about so flipplantly either.